Inherited IRA RMD ?

[genelawson566]

I searched the Community but could not find the answers to my questions, so here goes:

I inherited a Traditional IRA in February 2023.  I have since direct-transferred this IRA into a new account naming me as the beneficiary from "Jane Doe". 

Question #1: Jane Doe , 91 yrs old, did not take her RMD  for 2023 prior to her death.   Do I have this correct: For 2023,  I will need to take the lessor of  Jane Doe's RMD or an RMD calculated by new account ?  Like, if Jane would have had to take $12,000, but now that it is under my name, I would have to take $10,000;  $10,000 is the actual RMD I am required to take ?

Question #2:  As to my required RMDs going forward, I understand I have 10 years to complete the process of depleting the IRA through RMDs and other optional distributions.  I have read conflicting opinions as to whether or not my RMDs have to be in somewhat equal amounts over the next 10 years (recalculate at the end of every calendar year) or if, for the sake of example, I could just leave all the money in the IRA until year 10 and then withdraw the balance ?  Is there a clear, current, answer to this question?

Thank you ! 

[JulieS · Accepted solution]

Yes, you are required to take Jane's RMD for 2023, because she did not. The answer to question 1 depends on whether you are an eligible designated beneficiary. 

An eligible designated beneficiary  is:

• The surviving spouse
• The surviving minor child
• A disabled individual, or a chronically ill individual.
• Any other individual who is not more than 10 years younger than the IRA owner.

If you are an eligible beneficiary, the RMD is based on the longer of your single life expectancy shown in Table I; or the owner's life expectancy.

In other words, if you are an eligible beneficiary and you are younger than Jane Doe, the RMD is based on your life expectancy. 

If you are not an eligible designated beneficiary, the RMD is based on Jane's RMD. 

Question 2 The 10-year rule requires the IRA beneficiaries who are not taking life expectancy payments to withdraw the entire balance of the IRA by December 31 of the year containing the 10th anniversary of the owner’s death.

As long as you comply with this rule, the size and frequency of distributions do not matter. You can wait to distribute all of it  (except for the initial RMD) near the end of the ten year period. 

[fanfare]

Since she was 91, IRS has clarified that yearly RMDs are required according to the formula when the decedent died after their required beginning date for RMDs.

" ... if the owner died in 2022, the beneficiary would have to fully distribute the plan by December 31, 2032."

@genelawson566